India on brink of 'quantum leap,' Modi tells investors
Indian Prime Minister Narendra Modi promised on Sunday to pursue predictable policies and ensure stable taxes, in a speech that sought to address concerns for foreign investors in Asia's third-largest economy.
U.S. Secretary of State John Kerry led a roll call of leaders, including U.N. Secretary General Ban Ki-moon and World Bank head Jim Yong Kim, converging on Modi's home town of Gandhinagar for the Vibrant Gujarat business summit.
U.S. President Barack Obama visits India later this month.
Eight months into Modi's rule, his failure to lift the economy from its longest growth slowdown in a generation has raised questions about how much substance there is behind his promise of "red carpet, not red tape".
"We're trying to complete the circle of economic reforms speedily," Modi told the event that he founded when he was chief minister of the industrial state.
"We are also keen to see that our policies are predictable. We're clear that our tax regime should be stable," Modi said, speaking in English but making the occasional aside in Hindi.
Along with speakers from Japan, Canada and Singapore, Kerry praised his host and avoided direct criticism. But he hinted at the need to cut back India's stifling bureaucracy.
"We no longer live in a world where a country is going to be competitive if its bureaucracy sends people from door to door and window to window and meeting to meeting," he said.
Modi spoke on Sunday of the achievements he hopes will help lift hundreds of millions ofIndians out of poverty, including the opening of more than 100 million bank accounts, a 'Make in India' campaign to promote manufacturing, and plans to expand the rail, road, energy and digital networks.
"We are planning to take a quantum leap," the 64-year-old leader said.
Among the deals announced was a $4 billion agreement between U.S.-based solar power firm SunEdison (SUNE.N) and Indian conglomerate Adani Enterprises (ADEL.NS), to build one of India's largest solar panel makers.
Vibrant Gujarat, held every two years, has yielded billions of dollars in investment promises, though only a fraction of the deals announced have come to fruition.
Modi aims to lift stagnant capital investment that has held back India's growth to 5.3 percent. That is expected to accelerate this year to 6.4 percent, said the World Bank's Kim, who called India a "bright spot" in a mediocre global landscape.
Mukesh Ambani, India's richest man with a fortune estimated at $19.7 billion, said his Reliance Industries (RELI.NS) conglomerate would invest 1 trillion rupees ($16 billion) in Gujarat over the next year to 18 months.
Sam Walsh, CEO of global mining giant Rio Tinto (RIO.AX), flagged two potential projects including a $2 bln iron ore project in Odisha state. Woodside Petroleum <WPL.AX > CEO Peter Coleman, whose firm signed an agreement with Adani to explore sourcing and marketing of liquefied natural gas, said there were fiscal improvements to be made, though also potential.
"Is India open for business? We believe it is," he said.
Modi has made headway on making it easier for outsiders to invest more in real estate, insurance and defence, but a rigid labour market and rotten infrastructure are huge deterrents.
India slipped to 142nd out of 189 in the World Bank's latest Doing Business Index. Modi wants India in the top 50.
"Investors want credibility, stability and at the same time flexibility. Right now, India is a bit of an inflexible market," said Kilbinder Dosanjh, a director for Asia at Eurasia Group, a geopolitical risk consultancy.